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On October 10, the German Marshall Fund of the United States (GMF) hosted a panel discussion entitled "Climate Change and Development-Perspectives in View of the COP15," exploring the topic of climate change as a development issue. The panelists included the Honorable Ulla Tørnæs, Danish Minister for Development Cooperation, the Honorable Bert Koenders, Dutch Minister for Development Cooperation, and Jonathan Lash, President of the World Resources Institute. Craig Kennedy, President of GMF, officially opened the event and Lael Brainard, on leave from the Brookings Institution, moderated the discussion. Overall, the event was very successful and produced an insightful and useful discussion about the many challenges and prospects of addressing climate change and development issues together in the future.

Key Points:

• Although mainly caused by developed countries, the effects of climate change disproportionately affect the poorest populations in developing countries-so it is essential to address climate change as a development issue.
• There is a need to increase private funding that focuses on climate change, but these funds must be additional and not replace official development assistance. These funds must also be steady and predictable.
• There must be innovative approaches to funding climate change initiatives that shift focus away from the costs of reducing carbon emissions and towards opportunities for investing in clean technologies.
• Climate change, development, and financing must all be linked to the development of clean technology. This technology must be widely distributed and affordable in both developed and developing countries.
• While mitigation and reducing long-term climate change remain important goals, the development community must also focus considerable resources on adaptation efforts for populations already facing the effects of climate change.  

Lael Brainard opened the discussion by thanking the German Marshall Fund for hosting such a vital discussion on a timely topic. She emphasized that although the world is currently focused on the financial crisis, we must not lose focus on our longer-term goals of addressing and dealing with climate change and sustainable development. Dr. Brainard then introduced the panelists and provided some substantive background on the relationship between climate change and development.

Minister Tørnæs spoke first and emphasized the urgency of dealing with climate change as a development issue. She went on to argue that developed countries should aim to reach the goal of committing 0.7% of GDP to official development assistance in order to reach important development goals. Minister Tørnæs also highlighted the need for a comprehensive approach that would incorporate a number of agencies responsible for infrastructure, water and sanitation, agriculture and forestry, and for health. Finally, she stated that it is essential to ensure national ownership of climate change programs and developing countries' priorities must form the basic framework for development assistance in order to ensure effective implementation. Minister Tørnæs closed her speech by discussing her hope that the COP15 will provide a forum for a close dialogue with developing countries in Asia and Africa to address these challenges more effectively.

Jonathan Lash began by noting that each day brings horrific news concerning climate change and its devastating effects around the world. As the only panelist from the U.S., Mr. Lash focused his comments on how the U.S. is likely to address climate change under the next administration. He first highlighted the similarities between the candidates, emphasizing that the next administration will certainly be more engaged in the international discussions on climate change. Mr. Lash noted that both candidates are committed to cap and trade policies and following a similar approach as the Lieberman-Warner bill, which includes acknowledging all industrialized countries will need to legally commit to reducing carbon emissions but the commitments in developing countries such as China and India will not look the same as the commitments the United States and Europe will take on. Mr. Lash suggested that the U.S. should be ready to act unilaterally to advance solutions to climate change while at the same time attempt to create bilateral talks with China due to similar energy sources, a close economic relationship, and shared security interests.

Next, Mr. Lash painted two distinct pictures of how the next administration might address climate change. The first scenario presented the next administration as taking a "big picture" approach and recognizing that climate change, the economy, and development are deeply interconnected and should be addressed with a more comprehensive long-term strategy for moving forward both domestic policy as well as trade and development policies. Mr. Lash then presented an alternative scenario in which the next administration would attempt to lay out a set of fragmented policy prescriptions to deal with specific energy, trade, and development challenges. Finally, Mr. Lash suggested that Senator Obama might be more likely to take the former approach while Senator McCain the latter; however, the approach will also be largely determined by other key actors in the administration, such as the candidates' selections for treasury secretary.

Finally, Mr. Lash suggested that the outcome of the COP15 is largely connected to the general reform of the Bretton Woods system.  With the current financial crisis and growing concern over the relevancy of the World Trade Organization, Mr. Lash wondered if the world is looking for a new Bretton Woods style institution that could address climate change and development together.

Minister Koenders gave a short presentation that emphasized three points he considered central to the discussion. First, climate change will undo the largest advances towards development in many countries. Second, the developed countries must not only contribute funds, but also provide political leadership in exploring opportunities to reduce climate change. Thirdly, public funds are not sufficient to reach development goals, but that private funding must be additional to public financing rather than replacing it.

Additionally, Minister Koenders emphasized that while we must be focused on reaching long term development and climate change goals, there are also certain urgencies that require immediate actions, such as deforestation. Finally, Minister Koenders argued that the development community has a responsibility to base climate change solutions in local economies and to help developing countries set up relevant governance structures, such as ministries for the environment.

Following the presentations, Dr. Brainard encouraged the panelists to speak about the U.S. proposals for a border tax on goods coming from countries that do not use a carbon tax-a tariff targeting countries that do not follow international carbon emission standards. Mr. Lash explained that the idea that cap and trade policies need a border carbon tax is based on false conclusions and growing anti-globalization and anti-trade sentiments. He then emphasized that these proposals are often aimed at punishing specific countries, such as China-even though the most commonly imported goods are not those which are carbon intensive to produce. Minister Tørnæs added that these proposals by the U.S. are slightly inconsistent because the U.S. is considered to be one of the largest obstacles to reaching an agreement at the COP15.

Dr. Brainard then asked the panelists to elaborate on sources of financing to address climate and energy issues in developing countries-especially considering that developing countries' governments and budgets are already too thinly spread. Minister Tørnæs responded that the most important aspect of ensuring funding will be for developed countries to adhere to the Paris Declaration and for the OECD to stay committed to financing solutions to climate change and development. Mr. Lash responded to the same question by emphasizing concerns that if we divide climate change and development challenges into too many separate categories, there will never be enough funding from developed countries to address all of the issues. Again, Mr. Lash advised that the international community take a broader, more comprehensive approach to the topic by pooling funds and connecting climate change and development to technological development.

Building on Mr. Lash's statement, a participant asked whether technology funds are complimentary to other climate change and development funds or if they are creating competition. Minister Tørnæs described the separate fund for technology as complimentary and even necessary to connect climate change and development issues, especially since official development assistance is lagging far behind what it should be to reach the development goals. Mr. Lash mentioned that there has been a huge spike in venture capitalists investing in clean technology-which is generally positive-but these investors are not in it for the long term and separate sources of funding are necessary to ensure that these clean technologies are widely available and affordable for developing countries. Minister Tørnæs added that she hoped the COP15 might produce some mechanisms for this transfer of technology to developing states. Minister Koenders also highlighted the Netherlands' investment in developing clean technologies.

Another question that was raised was how to ensure that private funding is directed to developing countries in order to more effectively address climate change as a development issue. Mr. Lash responded that just as other forms of investment flow to developing countries, it is important to help the private sector identify markets for clean technology in these countries.

Overall, the discussion highlighted the importance and urgency of including climate change as a development issue. Furthermore, the panelists made some important suggestions about how to establish sufficient and reliable financing to address these challenges. The discussion provided some useful insights and suggested some essential steps for moving these important issues forward. 

A podcast of the discussion is available on GMF's Virtual Forum.  Please click here.